The value of Facebook to protestors in the Middle East is very different to the value of Facebook on the New York Stock Exchange (NYSE).
Facebook has changed how the world communicates. It, perhaps more than any other idea or product, is the epitomy of globalisation. While it may be inevitable that Facebook goes public, the question is: What is Facebook worth?
LinkedIn, a professional networking site, began trading its shares on the NYSE recently. LinkedIn's shares more than doubled during its debut. Shares opened at US$45 and rose to over US$94 (a 109 per cent rise) by the end of business. Interest and profit in LinkedIn shares indicates a high demand for publically-listed social networking sites. LinkedIn recorded a profit of $15.4 million in 2010, according to the Wall Street Journal, this and the demand for stocks in internet companies contributed to its value on the NYSE.
At the end of its first day on the market, LinkedIn was worth $8.9 billion. LinkedIn, with 100 million members, allows people to network professionally online and provides recruiting tools. It makes money from online ads, premium subscriptions and hiring tools for recruiters. MySpace, owned by global media giant Rupert Murdoch, has 110 million active users worldwide. Murdoch paid US$580 million for the site.
Facebook has about 550 million members. This equates to one out of every dozen people on the planet. Facebook members speak 75 languages and spend more than 700 billion minutes on Facebook every month. Last month the site accounted for 1 out of 4 American page views. Its membership is growing at a rate of 700,000 people a day, with the company doubling in size since 2009. Facebook has wired together a twelfth of humanity into a single network, creating a social entity almost twice as large as the U.S. If Facebook were a country it would be the third largest, behind only China and India. It has radically transformed how the public and private sector engage and communicate with each other.
In January 2011 the value of Facebook was estimated at US$50 billion.
It is expected to be worth US$100 billion in 2012. The value of Facebook is projected at US$234 billion in 2015. Interviewed in December 2010, Facebook CEO Mark Zuckerberg and Time Person of the Year (beating WikiLeaks founder Julian Assange, Afghanistan President Hamid Karzai, The Tea Party, and the Chilean miners for the award) suggested it was only a possibility he would list the company he started as a 19 year-old student at Harvard University.
Equity issues about access to the internet and social media sites like Facebook aside, social media has changed how we understand what is going on in the world. Researchers have found that Facebook users judged posted news content to be more credible than content posted on the site by traditional news organisations. The internet generally, and sites like Facebook specifically, is not just a mass medium it's a "massively delivered niche medium." Social networking sites such Facebook share many of the attributes of citizen journalism.
Given the financial success of LinkedIn it may be difficult for Zuckerberg to resist floating his company. It is probably inevitable that Facebook will float on the stock market. We might then know what Facebook is worth, but will it change the value of Facebook?
There is an communal aspect to Facebook. Users can sign up for free and are able to navigate around the revenue raising devices and options (such as buying virtual credits for games). In return the site provides links with families, communities and those with common goals. Facebook is providing avenues for citizen journalism and global interconnectedness never seen before. While some might overstate the value of social media in reform movements like those seen in South-east Asia in the 1990s and the Arab Spring movements of 2010-2011, its value is in its public accessibility.
Habib Haddad has described how protesters in Egypt used Facebook not simply to communicate but to build solidarity and to "breach the historical fear of the power of the government", saying the "rebellion reached a breaking point when people posted pictures of themselves on Facebook – revealing their identity and daring others to participate". Sites like Facebook are a "multiplier of sentiment and an empowering force for individuals" once "disparate, disconnected, disaffected individuals seeking change".
It is people who are bringing down regimes in the Middle East. It is not the mainstream media or the digital media, but digital media does provide a powerful medium by which "soulful calls for freedom have cascaded across North Africa and the Middle East." There is no doubt that the average civilian has just as much access to public platforms as the paid journalist (so long as they has access to the internet). With the growing popularity of social media it's becoming easier for individuals to partake in the capturing and documenting of history.
This is the real value of Facebook. It has more value to the many that are struggling to be heard in far-away dictatorships, than any value listed on the NYSE.
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